Post navigation

Wal-Mart in the SEEPZ

Mumbai: Arriving to the hotel at 1 AM, waking up at 630 AM, we were hurtin’ for certain, but still excited to be in India and about the business at hand. We met early with Brother Ramen Pandey, General Organizer for the India National Trade Union Council (INTUC) and head of their youth division. He brought in hand one of his colleagues who services a similar local in Mumbai. When he heard us talking about Wal-Mart and the meetings before us, he mentioned that he represented a number of companies in the SEEPZ who were primary contractors for Wal-Mart in jewelry manufacturing.

SEEPZ? We did not get it a first, but it was an abbreviation for Santacruz Export Processing Zone — which was the Indian equivalent of what we would identify as a free trade zone in the US, where standard taxes, environmental, and labor laws might now apply. We jumped at the chance to see if we could tour some of the union companies in the SEEPZ and headed there in the early afternoon. Santacruz was the name of an old Mumbai neighborhood with roots back to Portuguese colonialization not that far from the municipal airport.

The guards at the gate dimmed our delegations enthusiasm as we were stripped of our cameras. Our expectations of taking pictures of squalid working conditions and workers in dire circumstances were dashed.

And in fact with these two unionized companies we did not see either of these two situations on our Wal-Mart watch. We toured Elegant Jewelry, which mass produces diamond rings for Wal-Mart first and saw the manufacturing process from start to finish. The use of wax “forms” to make the rings and set the diamonds, rather than hand setting was novel to me. There were some situations in the polishing area where we wondered if gloves and face masks would not have made the conditions better for the workers, but this was not an area covered in dust or poorly ventilated. There were glass fronted screens on the polishing machines which pushed the dust away from the operator. The general appearance and conditions were decent, even if not outstanding.

Not far away we met with the Director Andiruddh Deo (Brig. Ret) and foreman in their conference room and they seemed forthright in discussion their relationship with Wal-Mart. They, like Elegant, had been working for Wal-Mart for 2 years. They were inspected annually on a schedule twice and once by “surprise.” They had not passed the first inspection because their records showed too many hours of overtime worked, which they had to resolve to continue. They complained about this — their workers wanted more overtime and they wanted to allow it they claimed, and the union backed them up. The limit was adherence to the law in Indian which limited overtime to 60 hours per month, a little less than 2 hours of overtime per day. Director Deo thought this was unfair competition since Chinese workers could legally work 12 hours and Indian workers could only work 10 hours, he felt he was dealing with unfair competition. Minimum wages were paid. Once again not much above what the law would allow — about 3000 rupees per month (less than $80 USD). Essentially, this was the story here — Wal-Mart was forcing its supplier to obey the law — no more, nor less.

And, there is a dilemma? I don’t doubt that many of the workers — who in the main were very young and in their late teens and early twenties — in fact wanted the overtime to make more money. I had heard the same story from textile shop stewards a year ago in Nairobi, complaining about enforcement of “standards,” which were helpful, but reduced their income, which was already paltry. When question the Director indicated that the Wal-Mart inspector was happy that they had a union and in fact “preferred it that way.” That also had the ring of truth to me. Wal-Mart wanted the cover to protect its brand and image, and at $75-80 month for labor costs, frankly it could afford it. The union needed to make sure that the companies it had under collective agreements had work, so was not in a position of bargaining strength in a global economy, where with more push, more of the work would have been pulled to China and Thailand.

Despite the wild west nature of export zones like the SEEPZ, Jason Judd from the AFL-CIO who was accompanying me, shared that from his experience in Cambodia many times the conditions were actually better in the zones than outside where it was more disorganized and chaotic.

What we saw might be sketchy, but there was no scandal here — just regular grade, classic American rapacious capitalism transferred globally with laser machines and high tech shrewdness. No one has come up with an answer to that problem yet.